Alarm Capital Alliance: 2011 year of growth

MEDIA, Pa.—Alarm Capital Alliance, an independently owned company based here that acquires and manages security alarm contracts, recently announced it has made acquisitions of about $1 million during 2011, and expects its RMR will be more than $3.7 million by the end of the year.

Amy Kothari, ACA president and CEO, told SSN by email that the company has focused on developing “efficient due diligence, rapid account integration, and customized systems, processes and procedures.” Founded about 11 years ago, ACA has consistently experienced CAGR of more than 30 percent, Kothari said.

In 2011, ACA forged new dealer partnerships and acquired more accounts from current dealers, she said.

By the end of the year, ACA expects to complete 50 portfolio acquisitions, totaling $806,292 of RMR, and acquire $308,890 of RMR through the company’s dealer program, the company said.

ACA’s new dealer program was launched earlier this year at ISC West. Bond declined to discuss the number of dealers who have signed up so far, but said the program “is growing steadily” and the company plans to actively market it in 2012.

A significant part of the new growth for the company comes from California, Arizona and Colorado, ACA said. “California has become a hot spot for us,” Bond told SSN. “Nearly half a million dollars in our 2011 acquisitions alone are in California.”

She said ACA, which typically makes bulk buys of 500 to 2,000 accounts at a time, plans to continue making acquisitions in those states and more. Currently, Bond said, the company “is in 26 states and growing.”

The company had just over 100,000 customers in 2010 and expects to exceed 116,000 by the end of 2011. Bond said ACA’s customers are concentrated in 10 states: Pennsylvania, New Jersey, Florida, Texas, Oklahoma, California, Washington, Virginia, Arizona and Maryland.

The company said the size of its acquisitions in 2011 ranged from two buys with more than $200,000 in RMR to 29 that involved less than $5,000 in RMR.

Bond said the company’s growth is due to what it calls its “unique business model,” in which the independent dealers that ACA buys from remain very involved with the accounts after ACA purchases them and takes over billing.

Dealers continue to market under their own business names and use their own decals and lawn signs, and most continue to service the accounts.

Bond attributes ACA’s low attrition rate of 7.6 percent—below what she said is the industry average of about 10 percent—to that smooth transition when ACA buys dealer accounts.

“The dealer still has that ongoing relationship, he’s still in the picture in most cases, so his subscribers don’t realize a significant change,” Bond said. “They know that the company they trusted initially is still in business, and they continue to call them for service and give them referrals.”

She said one of the reasons dealers are attracted to ACA is the “detailed intelligent reporting” they receive in the guarantee year after they sell their accounts so they can keep track of how they’re performing.

“We have created these very intuitive reports that dealers are provided with monthly throughout the guarantee year,” Bond said. “We are providing them with the tools to protect their sale and … they love it.”

Also, she said, instead of just informing dealers when their accounts have canceled, as some other companies do, “we really work with the dealer so there’s an opportunity to save those accounts before it’s too late. We’re in the business to buy accounts and we don’t want them to go away, whether it’s in the guarantee period or out of it.”